The dollar was mixed in Europe due to varying cross-currents and a rise in risk assets ahead of policy decisions from the BoE and ECB. They are both expected to leave policy unchanged. USD-JPY was an early mover as a downdraft in U.S. Treasuries lifted yields and this triggered a move to 100.12 highs. BoJ Governor Kuroda also repeated his willingness to ease policy again if next year's sales tax hike dampened activity. The comments followed today's unchanged policy stance from the BoJ. EUR-CHF also saw decent demand after yesterday's bullish break higher, which fed the underlying bid in USD-CHF and helped the EUR-USD tone, leaving it near 1.3200 as bids held the downside again. GBP consolidated recent gains and Cable traded comfortably above 1.5600. Elsewhere, SEK fell as the Riksbank left rates unchanged at 1%, but two policy dissenters triggered a bout of repositioning.

[EUR, USD]EUR-USD is trading on a stable footing ahead of the ECB policy announcement. Early dollar demand forced it from 1.3200 back to 1.3165 as intra-day accounts responded to a pick up in U.S. yields. Follow through on the EUR downside continued to meet solid demand ahead of long-term support from 1.3145 to 1.3135. A positive guidance for the EUR today has been underlying strength in EUR-CHF and EUR-JPY amid a rise in risk assets and underlying monetary policy. The SNB have reiterated its monetary policy stance this week as it looks to temper sentiment in the face of rising yields and a pick up in economic activity, while the BoJ also gave its commitment to easy policy today after it left policy unchanged.

[USD, JPY]USD-JPY surged through 100.00. European names were good buyers from the 99.55-60 area and U.S. account demand steepened in the 99.80s. This offset early model fund profit taking and an Asian central bank offer. Bias for the dollar pairing is firmly skewed to the topside and a very heavy mixture of stop and offers are noted from 100.00 to 100.20 ahead of a double-top from late July at 100.45. The BoJ and Fed policy stance supports further gains. The BoJ are not expected to ease policy again this year, but have indicated support for the economy if needed and Kuroda specifically cited next year sales tax hike as a potential risk. Most market participants think Kuroda is willing to offer more stimulus next year to absorb any adverse impact and he indicated this today in his post-meeting press conference.

[GBP, USD]Cable consolidated ahead of the BoE policy decision. Dip buying is prevalent underneath 1.5600, while long-term accounts have left bids into 1.5520-30 and through 1.5500 as U.K. recovery expectations support demand for U.K. assets. The BoE decision should be a non-event. An unchanged policy stance and no statement is expected. The market is long of GBP and aside from a brief bout of profit taking the bias is firmly on the topside. Long-term resistance at 1.5750 is still standing in the way of much firmer levels. When Cable rallied in mid-August there were doubts whether there was significant momentum to clear mid-June highs, but it does look as if Cable is building up for an extended push higher based on a rising channel base since it rebounded out of 1.4800 in early July.

[USD, CHF]EUR-CHF traded at a three-week high on heavy Swiss order flow. A large name was active in EUR-CHF, GBP-CHF and USD-CHF from the European open following yesterday's CHF drop over the London close. The shift in the CHF came on a plethora of factors, exacerbated by thin trading conditions. Aiding the risk backdrop was the reduced threat of a wider military conflict in Syria as the U.S. look set for limited action. U.S. yields are also on the rise and the rout in emerging markets has eased after fresh measures from the Reserve Bank of India and signs that emerging market countries will discuss coordinated policies at the G20 over the next two days. Against this backdrop USD-CHF cleared 0.9400 from 0.9355-60 today and EUR-CHF traded within a pip of 1.2400 after it opened above 1.2350 and looks poised for higher levels.

[USD, CAD]USD-CAD traded in a narrow range in Europe after it found support in Asia from 1.0480 and traded back through the 1.0500 area. The dollar reasserted itself on the topside as U.S. yields picked up and this guided early European action. Thereafter, movement narrowed as consolidation set in ahead of the North American open. There are speculative bids that are still underpinning into 1.0470-75 and corporate interest at 1.0450. Adding to the underlying tone is a U.S. account buy recommendation that is looking to go long at 1.0440 with a target of 1.0800. Sources have said that on an intra-day basis the upside could still remain capped due to 1.0475 and 1.0500 expiries.